IRS 8824 2021 free printable template

B c You can establish to the satisfaction of the IRS that neither the exchange nor the disposition had tax avoidance as one of its principal purposes. If this box is checked attach an explanation. See instructions. For Paperwork Reduction Act Notice see the instructions. Cat. No. 12311A Form 8824 2018 Page 2 Your social security number Realized Gain or Loss Recognized Gain and Basis of Like-Kind Property Received Caution If you transferred and received a more than one group of like-kind...

How to fill out IRS 8824

How to fill out IRS 8824

1. Obtain IRS Form 8824 from the IRS website or your tax preparation software.
2. Provide your name, Social Security number, and other identifying information at the top of the form.
3. Describe the property you gave up in the exchange in Part I, including the address and type of property.
4. Describe the property you received in the exchange in Part II, including the address and type of property.
5. Complete the details of the exchange in Part III, including the date of the exchange, fair market values, and any adjustments.
6. Fill out Section B if you received property that was not like-kind, detailing the amount received and any gain recognized.
7. Review the completed form for accuracy and ensure all necessary information is provided.
8. Attach Form 8824 to your tax return when filing.

Who needs IRS 8824?

1. Taxpayers who engage in a like-kind exchange of real estate or personal property must file IRS Form 8824.
2. Individuals or businesses that defer paying capital gains taxes through a like-kind exchange are required to fill out this form.

People Also Ask about

How do I record a 1031 exchange?

Your 1031 exchange must be reported by completing Form 8824 and filing it along with your federal income tax return. If you completed more than one exchange, a different form must be completed for each exchange.

What is the 95% rule in a 1031 exchange?

The 95 Percent Rule The total value of the properties identified CAN exceed 200 percent of the relinquished property's value, BUT you have to close 95% of the aggregate value of all the properties that have been identified.

Does a 1031 get a stepped up basis?

If you are holding investment property that had been part of a 1031 Exchange, upon your death, your heirs get the Stepped-Up Basis. All of the built in gain disappears upon the taxpayer's death. What that means is the value of the property at the date of your death would pass through your estate to your heirs.

Which of the following qualifies as a like-kind exchange?

The correct answer is d) A Dodge Ram pickup truck used in business traded in for a new Ford 250 pickup truck also intended for business use. A like-kind exchange is used to save tax liability in a similar kind of exchange.

Which of the following would not qualify as a 1031 exchange?

Examples of property that does not qualify for tax-deferral treatment under Section 1031: Personal use properties. Property held for sale, such as spec homes, building lots and “flips” Partnership interests.

How do you calculate basis for a new 1031 property?

An Example Calculating the Basis in 1031 Exchange In this case, you calculate your new basis by taking the original property's adjusted basis ($170,000), adding your new mortgage ($250,000), and subtracting the original property's outstanding mortgage ($150,000). This gives you a new tax basis of $270,000.

What qualifies as a like kind exchange?

Properties are of like-kind if they're of the same nature or character, even if they differ in grade or quality. Real properties generally are of like-kind, regardless of whether they're improved or unimproved. For example, an apartment building would generally be like-kind to another apartment building.

How do you calculate adjusted basis for a 1031 exchange?

New Property's Cost Basis The new or acquired property's cost basis must also be calculated. This is just the purchase price plus commissions. We'll use a purchase price of $400,000 plus $15,000 in closing cost for a cost basis of $415,000.

How to complete 8824?

Line 1: List the address or legal description and type of property relinquished (sold). Line 2: List the address or legal description and type of property received. Line 3: List the month, day, year relinquished property was originally acquired. Line 4: List the date relinquished property was transferred to the buyer.

What happens if you don't use all the money in a 1031 exchange?

When you don't exchange all your proceeds, it's called a “partial 1031 exchange.” The portion of the exchange proceeds that are not reinvested is called “boot,” and are subject to capital gains and depreciation recapture taxes. It's important to note that boot can take different forms.

How do you calculate adjusted basis of property?

Your adjusted basis is generally your cost in acquiring your home plus the cost of any capital improvements you made, less casualty loss amounts and other decreases.

What exchanges are not considered a like-kind exchange?

Securities, stocks, bonds, partnership interests, and other financial assets are excluded from the definition of like-kind property. Many people believe that like-kind properties must be of the same size or type to qualify. But that's not true—different assets can be exchanged as long as they qualify.

What is the new basis in a like-kind exchange?

The basis of the property you acquire in a like-kind exchange is generally the same as the basis of the property you transferred.

Who holds the cash in a 1031 exchange?

The qualified intermediary holds the money until you acquire the replacement property and your qualified intermediary will deliver funds to the closing agent.

How do you calculate adjusted basis of like-kind property given up?

It is calculated by taking the property's original cost, adding the costs for improvements and related expenses and subtracting any deductions taken for depreciation and depletion. It is necessary for determining capital gains taxes owed from the sale.

What can you roll a 1031 exchange into?

A 1031 exchange occurs when real estate investors sell one investment property (the relinquished asset) and roll the proceeds over into a “like-kind” property (the replacement asset). By completing exchanges, investors can defer any capital gains liabilities on their profits.

Do I have to spend all the money in a 1031 exchange?

In a standard 1031 exchange, you need to reinvest 100% of the proceeds from the sale of your relinquished property to defer all capital gains taxes. In a partial 1031 exchange, you can decide to keep a portion of the proceeds. This boot amount is taxable, while the money you reinvest is not.

How do I prepare for a 1031 exchange?

How to do a 1031 exchange Step 1: Identify the property you want to sell. Step 2: Identify the property you want to buy. Step 3: Choose a qualified intermediary. Step 4: Decide how much of the sale proceeds will go toward the new property. Step 5: Keep an eye on the calendar. Step 6: Be careful about where the money is.

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What is IRS 8824?

IRS Form 8824 is used to report like-kind exchanges of real property under Internal Revenue Code Section 1031, which allows taxpayers to defer recognition of capital gains on certain exchanges.

Who is required to file IRS 8824?

Taxpayers who engage in a like-kind exchange of property must file IRS Form 8824 to report the details of the exchange, including those deferring capital gains.

How to fill out IRS 8824?

To fill out IRS Form 8824, taxpayers need to provide information about the properties exchanged, the dates of the exchange, the gain or loss realized, and the fair market value of both the relinquished and received properties.

What is the purpose of IRS 8824?

The purpose of IRS Form 8824 is to allow taxpayers to report like-kind exchanges in compliance with tax regulations, facilitating the deferral of capital gains taxes.

What information must be reported on IRS 8824?

IRS Form 8824 requires reporting information such as the description of the relinquished and received properties, the dates of the exchange, the amount of gain or loss realized, and the fair market values of properties involved.